Originally written by Timothy Adler on Small Business
The government has confirmed those affected by IR35 tax changes, potentially bringing hundreds of thousands of freelancers within PAYE, will not be fined if they get things wrong in its first year.
Unless, that is, the taxman finds evidence of deliberate non-compliance with the controversial new IR35 rules.
This soft-landing period will only last until April 2021.
The Treasury has published the findings of its review into IR35 off-payroll working rules, due to come into force next month.
As expected, there will be no delay to the implementation to IR35, but the key changes are:
Customers (both employers and freelance contractors) will not have to pay penalties for inaccuracies relating to the off-payroll working rules in the first 12 months unless there is evidence of deliberate non-compliance
HMRC will amend the legislation to exclude wholly overseas organisations with no UK presence
The government will have a legal right to force clients to respond to a request for information about their size from an agency or worker
Brian Palmer, AAT tax policy adviser said: “This means that if employers or [freelance] contractors have taken reasonable steps to comply but get something wrong, HMRC will not be pursuing them with fines and penalties.”
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